Mechanisms involved in the transduction of neural signals and the control of tissue specific gene expression are studies. The pineal and pituitary glands are used as model systems. The details of the chemical and ionic components of transmembrane signal processing and of neural and tissue specific regulation of gene expression are analyzed. Signal transduction in the pineal gland is of special interest because cAMP and cGMP are regulated by dual receptor mechanisms which appear to interact at the level of regulation of adenylyl and quanylyl cyclases. One leg of these pathways activates these enzymes via GTP binding regulatory proteins, similar to Gs alpha. In the area of the neural and developmental control of gene expression, advances have been made in purifying N- acetyltransferase and hydroxyindole-O-methyltransferase, and in isolating cDNA clones coding for these enzymes. It has been found that three HIOMT mRNA molecules exist, which appear to be the result of alternative splicing; one contains a truncated LINE sequence in the coding region. Recent studies have extended second messenger analysis into the role of transcription factors in signal transduction in the pineal gland. The major hormonal product of the pineal gland is melatonin. Melatonin has been found to block GnRH induced increase in [Ca++]i and to block GnRH-induced depolarization. Melatonin appears to act on a subpopulation of GnRH-sensitive cells.